Arctic gas holds an answer

The Canadian government rates Arctic gas as one of its answers to developing cleaner energy sources, while protecting the nation’s wealth and jobs.

In a speech to open a new session of Parliament, the government said Canada’s North represents “both an untapped source of clean fuel and an unequalled avenue to create economic opportunities for northern people.”

To that end the administration of Prime Minister Stephen Harper has pledged to reduce regulatory and other barriers to extend a pipeline network from the North to “bring new energy supplies to markets in southern Canada and throughout the world.”

“Economic development in Canada’s North, led by a new standalone agency, is a key element of our northern strategy,” the government said.

Despite that upbeat message, proponents of the Mackenzie Gas Project are still waiting for a deal with the government to clear the way to regulatory approvals and possibly offer federal loan guarantees, shipping commitments or other incentives to get the venture moving ahead.

Bob Reid, president of the Aboriginal Pipeline Group, which has rights to acquire a one-third equity stake in a Mackenzie Valley pipeline, told the Financial Post there is no deal he is aware of and “nothing to report.”

“It’s a changing environment and it remains to be seen what our future will be,” he said. On climate change, the government reiterated its interest in implementing a North American-wide cap-and-trade system for greenhouse gases that most expect the Obama administration will favor.

The Harper administration said it will work with provincial governments and the United States, Europe and other industrialized countries to seek an agreement.

“We will also need to make greater use of technologies that do not emit greenhouse gases,” it said, adding the government has set an objective that 90 percent of Canada’s electricity needs will come from non-emitting sources by 2020.

Rick Hyndman, a climate-change advisor for the Canadian Association of Petroleum Producers, said the success of any market-based cap-and-trade system will depend on whether Canada can ensure that it is not left at a competitive disadvantage.

“Aligning our climate change policy with the U.S. and integrating climate-change policy and energy strategies is very important and necessary,” he said.

Getting the elements of a cap-and-trade policy “right” is important, he said, suggesting the U.S. is still some distance from determining exactly what those elements should be.

—Gary Park